Select Committee on Environment, Transport and Regional Affairs Memoranda


Memorandum by the Local Government Information Unit (AC 02)

  The Local Government Information Unit (LGIU) is an independent research and information organisation supported by more than 150 councils and the local government trade unions.

1.  INTRODUCTION

  1.1  The LGIU shares the concern felt by a large number of local authorities and other public bodies about the plethora of audit and inspections being undertaken by an increasing number of inspectorates. The Audit Commission is a central player in this and its role is about to expand because of the responsibilities it will assume under the best value regime.

  1.2  Whilst we acknowledge that the Audit Commission will continue to have wider responsibilities, it is on its role in relation to best value that we wish to concentrate our remarks.

  1.3  We have grouped these remarks under the following three headings:

    (i)  the purpose of inspection;

    (ii)  the approach of the Audit Commission to the inspection process;

    (iii)  resourcing inspections.

2.  THE PURPOSE OF INSPECTION

  2.1  Though they build on the existing work of the Audit Commission in many ways, the audit and inspection arrangements under best value are new for all concerned. This was acknowledged in the government's White Paper "Modern Local Government—in touch with the people" which saw such arrangements as necessary in order to give "a clear view of whether best value is being obtained."

  2.2  In our view, the nature of the duty on local authorities means that there will always be several views about whether best value is being obtained. There are a number of prescribed elements to which authorities will have to conform but, by and large, to use the catch phrase, "what matters is what works." Central government has, quite rightly, emphasised that this is about what matters for local communities.

  2.3  The White Paper however also foresaw further roles for inspection, namely: providing a "rigorous" check on the information authorities provide in their local performance plans and on the management systems that underpin them; supporting the government's intention to "establish high standards of probity in local government" and to "restore local accountability" (as the White Paper would have it); and to provide the foundation upon which "decisive action" would be taken in the event of an authority failing to act when its performance fell short.

  2.4  These strictures are now incorporated into the legislation on best value (the Local Government Act 1999) and its associated regulations and guidance. We consider that there is a danger that the role of inspection might become so central that it distracts from the primary duty of best value, the duty that is owed to local people. Particularly if inspection becomes the arbiter of whether best value has been achieved, authorities might be in danger of losing the focus on the things that matter to the communities they serve.

  2.5  The focus of an inspection therefore needs to relate clearly to the best value objectives. The Audit Commission, as well as local authorities and central government, will need to be clear about whether inspections are aimed at examining the state of a service and the likelihood that it will improve or decline over time, or whether the thing that is being inspected is the rigour of the best value review process itself. In our view, if inspection is not to usurp the role of local people in determining best value, the Audit Commission should concentrate on understanding the approach taken by the authority and testing the rigour of their arrangements to support it. The experience of the field trials carried out by the Audit Commission earlier this year seems to be that the focus of the inspection veered between the two. It is likely that, over time, the process will become seamless but in the meantime we are concerned that what inspectors might be doing amounts in fact to a re-review of a service.

  2.6  We have submitted comments to the DETR on the draft guidance on best value reviews in which we welcomed the fact that the government acknowledged that authorities would need to take a long term perspective in carrying out reviews. We also argued that it needs to be acknowledged that such a long term perspective might also require a long term solution as opposed to immediate, short term change. The Audit Commission, in inspecting an authority, will also need to understand the approach the authority is taking and perhaps recognise that all the solutions might not be immediately in place.

3.  THE APPROACH OF THE AUDIT COMMISSION TO THE INSPECTION PROCESS

  3.1  The different purposes that inspection serves also has a bearing on the approach that the Audit Commission adopts. We consider it important that it upholds its independence, particularly from central government who might have priorities for local government which differ from those enunciated by local communities. It is equally important however that it should not perceive its independence as amounting to a role of final arbiter of what constitutes best value.

  3.2  The inspection reports produced by the Audit Commission will be made publicly available and it is crucial therefore that there should be no surprises for an authority when it is published. We welcome the fact that the Audit Commission is committing itself to the idea that it will produce an "interim challenge", setting out and sharing with the authority the conclusions it has reached on how thorough the authority has been in reviewing its service and the actions it is taking to secure improvements.

  3.3  In our view, however, a number of authorities will be looking for advice and guidance before the inspection stage about the actions they are proposing to take. This will have increasing relevance in the context of best value where innovative solutions are on the one hand being encouraged but also where failure can bring penalties of one kind or another. The Improvement and Development Agency (IdeA) will be able to offer assistance in this regard but it is also necessary for the Audit Commission to recognise that it will have to acknowledge where such assistance has been given and not simply defer its judgement until the formal inspection takes place.

  3.4  The Audit Commission should, in our view, be able to offer advice as well as pass judgement, but it should also be aware of the other sources of advice that authorities might turn to, such as the IdeA.

  3.5  Most authorities, including those who have been formally piloting best value, are finding its processes challenging. The nature of the review process, the way in which it needs to transform ongoing performance management arrangements, and the depth of testing which will be required are leaving authorities with no alternative but to learn as they go along, re-examining and improving their processes over time.

  3.6  The Audit Commission will need to understand that the changes to culture and awareness within authorities that best value requires will not necessarily be embedded by April 2000 when the duty of best value comes into force, nor indeed perhaps for some time after that.

4.  RESOURCING INSPECTIONS

  4.1  The direct cost of inspection and the resources that will have to be committed to facilitating them are a matter of concern to most authorities. There appears to be no concrete indication of what the long term implications are likely to be. The government has said that, for the average authority, receiving the average amount of inspection, the cost will be neutral given the funding provided by government. This leaves many authorities wondering how average they in fact are.

  4.2  One of the issues affecting the amount of inspection an authority receives is how the Audit Commission treats services which an authority has split up for the purposes of review. At the moment there appear to be conflicting messages about whether this will result in an increased number of inspections for those authorities that take this approach. It seems to us that splitting services is a likely consequence of an authority adopting the "cross-cutting" approach to service review that the government wishes to see happening as a result of best value. It would be an unfortunate outcome if the Audit Commission's preferred method of inspection ended up deterring authorities from pursuing this more innovative approach to best value for fear of the increased inspection burden it might bring.

  4.3  We are aware that the Audit Commission, in the light of its field trials, hopes to reduce the impact of inspections in terms of the time and resources that they will entail, though not of course their rigour. If nothing else, the Audit Commission will have to be aware that in order for an authority to provide the level of assistance that appears to be required, sufficient notice of an inspection will have to be given. This assistance ranges from arranging meetings with a range of councillors and staff as well as representatives of service users, through to providing secure accommodation and facilities, and providing documents and other information.

  4.4  It is also a matter of great concern to authorities that scarce resources may have to be diverted from front-line service delivery in order to meet the requirements of inspection.

5.  CONCLUSION

  5.1  We do not take issue with the fact that inspection is an integral part of the best value regime. We believe however that the Audit Commission will need to approach its role with tact and discretion, in the early years at least, until it has more evidence of how well it can trust local authorities.

  5.2  We welcome the opportunity of raising the above issues with the Sub-committee and would be pleased to elaborate them further should the Sub-committee wish.

LGIU

December 1999


 
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